STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

September 3, 1968

Richard Hopewell
Deputy State's Attorney
Minnehaha County
Sioux Falls, South Dakota 57102

OFFICIAL OPINION NO. 68-23

Surplus funds may be used to supplement bond issue to build a county building

Dear Mr. Hopewell:

You have submitted the following request for an opinion:

"On November 8, 1966, the electors of Minnehaha County approved a bond issue:

'in an amount not exceeding $250,000.00, and shall bear interest at not to exceed 4 1/2% per annum, said bonds to become due and payable not more than ten years from the date of issue, for the purpose of purchasing site and the erection of a Juvenile Detention Facility for Minnehaha County, South Dakota, and to furnish and equip such building.'

"On July 23, 1968, bids for the erection of said Detention Home were opened by the Board of Minnehaha County Commissioners, and the cumulative low bid total for the general contract work, mechanical contract work and electrical contract work was $336, 180.00 (less alternative contract deducts in the amount of $25,178.00).

"The second paragraph of SDC 12.2302 (1960 Supp.) provides:

'Whenever the question of bonding the County for the purpose of building or renovating, improving, remodeling, altering, adding to or repairing a courthouse, jail, memorial building, or other County buildings shall have been submitted to a vote of the electors and such bond issue shall have been carried by a vote of the electors, then in addition to the proceeds raised from the sale of such bonds the board may, whenever there remains in treasury of such county an unexpended balance of any special fund and all claims against such fund have been fully paid, or when there remains an unexpended balance of the general fund and all claims against such fund have been fully paid, in its discretion, apply the whole or any part of such accumulated funds to the purposes specified in this section and it shall not be necessary to submit the question of such expenditure of the voters of the county.'

"It is the position of proponents of said Detention Home that, pursuant to SDC 12.2302 (1960 Supp.), the Commissioners have the power to immediately accept the foregoing cumulative low bid for the erection of said Detention Home and, for the bid excess ($86" 180.00) over and above the authorized bond issue amount, the Commissioners may utilize unexpended surplus balances in other County special and general funds. Short of an Attorney General's clarification of the purported power to so utilize other County funds to cover said bid excess, the Commissioners are of a feeling that it cannot at this time commit the County to such a fiscal process."

You have also submitted the following:

"Pursuant to the 1968 County Budget, $33,300.00 has been collected for salaries and operation related to said Detention Home; $28,300.00 of which will not be so utilized and apparently will be an unexpended surplus balance in said fund. Pursuant to the said 1968 County Budget, there also exists $30,000.00 which has been collected for the Bond & Interest Sinking Fund and which, due to the fact that said Detention Home Bonds have not yet been issued as originally anticipated, will result in further unexpended surplus balances. If the County can accept the building bids, can the County utilize the unexpended surplus balances of these particular funds for payment of the above related bid excess?"

It is my opinion that the proposition voted on by the electors sets only a limitation on the amount of the bonds that may be issued and does not set a limitation on the amount that may be expended for the Juvenile Detention Facility and that SDC 1960 Supp. 12.2302 does authorize the county to expend surplus funds for such additional costs without a vote of the electors. See Fuoss v. Vik et al, 80 SD 260, 122 NW 2d 213.

SDC 12.2016 reads as follows:

"The board of county commissioners may transfer the surplus moneys that may be on hand in any of the several funds to such fund or funds as they may deem for the best interest of the county or may appropriate such surplus moneys to the payment of any outstanding indebtedness of the county. No money in any fund shall be transferred therefrom unless there be left in such fund sufficient money to pay all outstanding warrants drawn against such fund, together with any other indebtedness or contemplated expenditures from such fund for the current fiscal year. No money shall be transferred from any sinking or interest fund unless sufficient money be left therein to pay all interest which may accrue on and the principal of all outstanding bonds."

It is my opinion that the above statute authorizes the Board of County Commissioners to transfer any surplus in the general fund for the purpose of assisting in the cost of constructing the Juvenile Detention Facility. It is also my opinion that the balance in the Bond and Interest Sinking Fund would not be available due to the limitation set forth in the above statute. See State ex rel Widdoss v. Esmay, 72 S.D. 270, 33 N.W. 2d 280.

Respectfully submitted,

Frank L. Farrar
Attorney General